Rates Cuts, New Look, and Other Links

The New Look

For the readers who visit the site often, you may have noticed that MDJ has gone through a face lift. The goal of the new design is to have the same features as the old layout, but with a cleaner feel. What do you think of the new look? Have you noticed any bugs? Any feedback would be greatly appreciated.

Another Rate Cut

The Bank of Canada has made another drastic cut to interest rates, this time, by another 0.50%! This is a great time to be a variable rate mortgage holder as more of your payment is going towards principle.

The general bias for now is that the economic downturn will last about 2 years and that there should be more rate cuts to come. Maybe we live in a bubble on the east coast of Canada, but have you noticed the "economic downturn"? I sure haven't.

About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

On interest rates, story this morning on Reuters predicting another rate cut in June… Has the world gone mad!

“Reuters
Published: Friday, April 25, 2008
TORONTO — Canada’s primary securities dealers unanimously predicted on Thursday that the Bank of Canada will cut its key overnight rate in June, but after that most are calling for a pause in the easing cycle.

That is consistent with a Reuters poll taken last week after key inflation data and ahead of the Bank of Canada’s expected 50-basis-point rate cut Tuesday.

Eleven of Canada’s 12 dealers, surveyed by Reuters, expect Canada’s central bank to lower its key interest rate to 2.75 per cent from 3 per cent at its next fixed announcement date on June 10. One expects a 50-basis-point rate cut to 2.50 per cent.”

Rate Cuts
These cuts are designed to increase liquidity in our financial system in an environment where banks are still reluctant to lend to one another. The slow down they speak of has thus far mostly impacted the USA. Canadian manufacturers are already feeling the squeeze of the weak US dollar and rising oil/fuel prices and will be further impacted as the US decrease their spending and exports drop. The real estate markets have slowed nationally in Canada and US owned companies like Dell, Steelcase and GM have already closed down or substantially reduced the workforce in several Canadian based subsidiaries. It will be at least a couple of years until the US economy picks up, thus Canada their largest trading partner is anticipating to bunker down and wait it out.

One thing I liked from the old format was the way you displayed the date of the articles. I don’t like the small font on the new display. I just don’t notice the date on the articles now which makes it harder for me to connect with them.